COLLECTED WISDOM™ On 401k Hardship Withdrawals
Hardship distributions are a valuable component of many 401k retirement plans. They encourage participation in the plan and provide a sense of security to participants as they seek a balance between retirement savings and current financial needs. But plan sponsors need to know the rules and administer hardship withdrawals carefully.
Hardship Withdrawals and the Mortgage Crisis - Summary: Hardship withdrawals from Vanguard DC plans rose in 2006 and 2007, although the absolute level of withdrawals is still quite low. The increase may be correlated with either the emerging home mortgage crisis or broader economic stress among financially vulnerable plan participants.
Located at: Vanguard Center of Retirement Research 
, April 2008. Click on headline for full article.
Hardship - Implementing New Rules - Summary: The final 401k and 401(m) regulations, which become effective for plan years that begin after December 31, 2005, add two new hardship events to the current four safe harbor hardship reasons that may be used by prototype plan documents.
Located at: McKay Hochman, February 2006. Click on headline for full article.
Hardship Withdrawals: An Overview - Summary: A good basic overview on the issue.
Located on: 401khelpcenter.com. Click on headline for full article.
Helping Employees Understand the Pros, Cons of Hardship Withdrawals - Summary: Some companies offer hardship withdrawals in lieu of loans against the retirement plan. Typically, the withdrawal is processed after the employee requests it with no questions asked. So, how can education be used as a gatekeeper and to help employees become aware of the pitfalls and their alternatives?
Located at: Financial Finesse , December 2005. Click on headline for full article.
Hardship Withdrawal of Employer Contributions - Summary: Generally, hardship withdrawals are restricted to funds from the participants' elective deferrals. A plan may permit hardship withdrawals from certain types of employer contributions, as well. Many plans limit the withdrawal of employer contributions because of complications that can arise when a participant is only partially vested. May a plan permit hardship withdrawals of employer contributions?
Located on: McKay Hochman, June 2004. Click on headline for full article.
Hardship Withdrawals Give Access to 401k Savings, But at a Cost - Summary: If you're in a financial pinch, you might be able to tap your 401k for a bailout -- but it could really cost you.
Located on: 401khelpcenter.com, December 2002. Click on headline for full article.
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